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    MANH
    Earnings call· Jun 2026(Q2 FY26)

    MANHATTAN ASSOCIATES Q2 FY26 earnings call MANH

    Jul 28, 2026 Source

    Executive summary

    Manhattan Associates Q2 FY26 — Record Bookings and Cloud Revenue Growth Driven by AI and New Product Editions

    Manhattan Associates delivered strong Q2 FY26 results, marked by record bookings and accelerated cloud revenue growth, driven by strategic investments in sales and marketing, successful AI agent monetization, and the introduction of new product Editions. The company is expanding its addressable market and enhancing customer value through a tiered product offering, while navigating persistent macro volatility and FX headwinds. Management remains confident in its full-year outlook, raising revenue and EPS guidance.

    Highlights

    5

    • Cloud revenue grew 26% to $127 million.

    • RPO increased 23% to $2.47 billion.

    • Achieved third consecutive quarter of record bookings.

    • AI offering contributed to deal activity and pipeline growth, with 100% conversion success from pilot to subscription.

    • Introduced 'Editions' for Manhattan Active solutions to expand addressable market and increase deal volume.

    Concerns

    3

    • FX was a $3 million headwind to sequential RPO growth and a $9 million headwind to year-over-year RPO growth.

    • GAAP EPS was down 9% to $0.85, impacted by an $8 million ($0.11 per share) restructuring expense.

    • Service revenue forecast reduced by $4.5 million for the full year due to adverse FX movements and timing of European implementations.

    Guidance & targets

    25
    CategoryTargetConfidence
    RPO growth
    towards the high end of $2.62 billion to $2.68 billion
    high materiality
    High
    Total Revenue
    $1.16 billion to $1.166 billion
    high materiality
    High
    Total Revenue
    $294 million to $298 million
    medium materiality
    High
    Total Revenue
    about $287 million
    medium materiality
    High
    Adjusted Operating Margin
    about 35.1%
    high materiality
    High
    Adjusted Operating Margin
    about 36.9%
    medium materiality
    High
    Adjusted Operating Margin
    about 36.1%
    medium materiality
    High
    Adjusted EPS
    $5.44 to $5.50
    high materiality
    High
    Adjusted EPS
    $1.45
    medium materiality
    High
    Adjusted EPS
    $1.37
    medium materiality
    High
    GAAP EPS
    $3.62
    high materiality
    High
    GAAP EPS
    about $1
    medium materiality
    High
    Cloud Revenue
    $505.5 million
    high materiality
    High
    Cloud Revenue
    about $130 million
    medium materiality
    High
    Cloud Revenue
    $132 million
    medium materiality
    High
    Service Revenue
    $513.5 million
    medium materiality
    High
    Service Revenue
    about $133 million
    medium materiality
    High
    Service Revenue
    $122 million
    medium materiality
    High
    Maintenance Revenue
    about $114 million
    medium materiality
    High
    Maintenance Revenue
    about $27 million
    medium materiality
    High
    Maintenance Revenue
    about $26 million
    medium materiality
    High
    License Revenue
    about $1 million per quarter
    low materiality
    High
    Hardware Revenue
    between $5 million and $6 million per quarter
    low materiality
    High
    Tax Rate
    about 22%
    low materiality
    High
    Diluted Share Count
    about 59 million shares
    low materiality
    High

    Operational metrics

    27
    Cloud revenue growth
    26%YoY
    Q2 FY26

    Cloud revenue was $127 million.

    Total revenue growth (excluding license and maintenance)
    13%YoY
    Q2 FY26

    Total revenue was $298 million.

    Total revenue growth (all-in)
    9%YoY
    Q2 FY26

    Total revenue was $298 million.

    Adjusted operating profit
    $104 million
    Q2 FY26

    With an operating margin of 34.9%.

    Adjusted operating margin
    34.9%
    Q2 FY26

    Adjusted operating profit was $104 million.

    Adjusted EPS
    $1.39up 6%
    Q2 FY26

    Better-than-expected performance.

    GAAP EPS
    $0.85down 9%
    Q2 FY26

    Decline resulted from approximately $8 million or $0.11 per share of restructuring expense.

    Free cash flow margin
    30.1%
    Q2 FY26

    Resulting from $91 million operating cash flow.

    Adjusted EBITDA margin
    35.4%
    Q2 FY26

    Alongside 30.1% free cash flow margin.

    Deferred revenue
    $343 millionincreased 14% year-over-year
    Q2 FY26

    Balance sheet item at quarter end.

    Cash and investments balance
    $186 million
    Q2 FY26

    Ended the quarter with $0 debt.

    Share repurchases
    $125 million
    Q2 FY26

    Invested in share repurchases in the quarter.

    Share repurchases (YTD)
    $275 million
    YTD FY26

    Total buybacks year-to-date.

    Remaining share repurchase authority
    $225 million
    Q2 FY26

    Remaining from authority announced in March.

    FX impact on total revenue growth
    70 bpstailwind
    Q2 FY26

    FX remains volatile.

    FX impact on sequential RPO growth
    $3 millionheadwind
    Q2 FY26

    Compared to a $29 million sequential tailwind in the year-ago period.

    FX impact on year-over-year RPO growth
    $9 millionheadwind
    Q2 FY26

    Compared to a $29 million sequential tailwind in the year-ago period.

    Restructuring expense
    $8 million
    Q2 FY26

    Associated with strategic decision to reduce investment in legacy areas and reinvest in strategic areas.

    Contract duration
    5.5 to 6 years
    Q2 FY26

    Remains stable.

    RPO recognized as revenue in next 24 months
    39%up from 38% at the end of Q1
    Q2 FY26

    Reflects strong deal volume and faster deployments.

    Partner-sourced deals growth
    4xvs H1 2025
    H1 2026

    Partners are leaning in and bringing pipeline and deals.

    Partner consultants certified
    doubledYoY
    H1 2026

    New certifications in the first half of the year.

    AI Active installed base penetration
    >10%
    Q2 FY26

    Touching over 10% of Active installed base either through pilot or subscription.

    AI pilot to subscription conversion success
    100%
    Q2 FY26

    Experienced since launch in Q1.

    Win rate metric
    >70%
    Q2 FY26

    Remained consistent.

    On-prem to cloud conversions (new cloud bookings)
    >40%
    Q2 FY26

    Represented over 40% of new cloud bookings.

    Net new logos (new cloud bookings)
    >25%
    Q2 FY26

    Represented over 25% of new cloud bookings.

    Industry KPIs

    7
    MetricValueDetails
    Revenue growth$298 millionUSD
    Rpo current rpo$2.47 billionUSD
    Bookings billingsrecord bookings
    Customer account count—
    Large deal new logo metrics—
    Operating FCF margin rule of 4034.9% (adjusted operating margin), 30.1% (free-cash-flow margin)%
    Ai product adoption monetization>10%%

    Orderbook & backlog

    1
    RPO$2.47 billionend of Q2 FY26

    up 23% compared to prior year and 5% sequentially

    FX was a $3 million sequential headwind and a $9 million year-over-year headwind to RPO growth.

    Product announcements

    1
    ProductTypeDetails
    Editions for Manhattan Active solutionslaunch

    Deals & partnerships

    6
    Global specialty retailerConversion and expansion

    Converting from on-prem to Active Warehouse and expanding to become an Active Transportation customer.

    Multinational conglomerateNew logo adoption

    Became a new logo Active Warehouse and Active AI customer.

    America's largest distributorsConversion

    Converting from on-prem to Active Warehouse.

    Large equipment retailerExpansion

    Existing Active Omni customer expanded to become an Active Warehouse and Active Transportation customer.

    Large food distributorNew logo adoption

    Became a new logo Active Warehouse, Active Transportation and Active AI customer.

    World's largest international retailersConversion

    Began the conversion from on-prem to Active Warehouse.

    Risks & headwinds

    3
    Volatile global macro environmentQ2 FY26, H2 FY26, FY26

    FX was a 70 basis point tailwind to total revenue growth in Q2, but an approximate $3 million headwind to sequential RPO growth and about a $9 million headwind to year-over-year RPO growth. Full year FX is now expected to be neutral compared to the prior year versus a prior expectation of a 1-point tailwind.

    Mitigation: Customers are still willing to invest in value-creating solutions; company continues strategic investments in innovation and sales/marketing. Management is anticipating and acknowledging volatility without being distracted by it.

    Restructuring expenseQ2 FY26

    Approximately $8 million or $0.11 per share.

    Mitigation: Strategic decision to reduce investment in legacy areas of the business and reinvest in strategic areas to help drive future subscription growth. Savings will be reinvested in sales and marketing and bonus accruals in 2026, with no direct margin benefit expected this year.

    Service revenue reductionFY26

    The $4.5 million reduction in service revenue from prior forecast.

    Mitigation: Due to roughly equal parts of adverse FX movements and the timing of European implementations. EMEA services revenue is expected to trough in Q3 and for growth to improve in Q4.

    What to watch in Q3 FY26

    5

    AI Agent revenue contribution

    Second half 2026 and 2027
    Currentpretty small contribution
    TargetIncreased materiality and specific guidance

    Why it matters

    AI monetization is a key investment thesis driver for software companies, and management indicated they will look for the right time to provide clear guidance.

    But again, because it's so early, we're not breaking that out. We'll look at when is the right time to break that out and give clear guidance on that in the future.

    Q&A highlights

    8

    How will AI agents contribute to revenue in H2/2027, and how will the new 'Editions' impact sales execution and potential disruption?

    It's too early to provide specific revenue guidance for AI agents, but they are seen as material. The 'Editions' are well-received by the sales team, as they open new market segments (Enterprise and Essentials) without creating friction, by allowing the company to sell its Active platform to customers previously served by older products or those with simpler needs.

    “Now this one is even easier. And the reason I say that is we're already selling to scale. We're already selling to this segment of the market. Now we get to sell our Premier product in that segment of the market.”

    asked by Terrell Tillman · answered by Eric Clark

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Investments Yielding Results

    Manhattan Associates' strategic investments in sales and marketing, initiated a year ago, are demonstrating significant returns. These investments, focused on building product-focused sales specialist teams, dedicated conversion and renewal teams, and maturing the partner ecosystem, have led to increased deal volume and three consecutive quarters of record bookings. This success underscores the effectiveness of the company's go-to-market approach and its ability to unlock untapped opportunities within its large addressable market.

    02

    AI Monetization and Differentiation

    The company's AI offering, Active Agents, is becoming a meaningful differentiator, contributing to deal activity and pipeline growth. Active Agents, comprising base agents and the Agent Foundry, enable customers to build and deploy their own agents directly into the AI platform without external data lakes. Early adopters have reported significant operational benefits, such as an 87% reduction in short picks and a 49% reduction in late shipment departures. The company has achieved a 100% conversion success rate from AI pilot to subscription, with Active Agents now touching over 10% of the Active installed base.

    03

    Introduction of Active Editions

    Manhattan Associates introduced 'Editions' for its Manhattan Active solutions, a new packaging motion designed to expand its addressable market. These Editions (Essentials, Enterprise, and Premier) offer tiered capabilities and pricing, allowing the company to serve a broader range of customers, from complex supply chains to smaller sites within large enterprises. This 'ladder' approach enables customers to start their journey on the Active platform and grow into larger feature sets without replatforming, facilitating cloud conversions and increasing cross-sell/upsell opportunities.

    04

    Strong RPO and Cloud Revenue Growth

    The company reported robust RPO growth of 23% year-over-year, reaching $2.47 billion at the end of Q2 FY26, and cloud revenue growth of 26% to $127 million. This performance was driven by strong execution, a healthy mix of sales from new and existing customers, and increased upsells. The expected recognition of 39% of RPO as revenue over the next 24 months, up from 38% in Q1, reflects strong deal volume and faster deployments, supporting future revenue acceleration.

    05

    Financial Performance and Outlook

    Manhattan Associates delivered better-than-expected financial performance in Q2, with adjusted operating profit of $104 million (34.9% margin) and adjusted EPS of $1.39. Despite a $8 million restructuring expense and FX headwinds🌐, the company raised its full-year 2026 outlook for total revenue, operating margin, and EPS. The revised guidance reflects confidence in continued business momentum, with full-year total revenue expected to be $1.16 billion to $1.166 billion and adjusted EPS of $5.44 to $5.50.

    AI-generated summary of the company’s earnings call. Not investment advice.